Northern Offshore, Ltd. (Oslo Bors: NOF.OL) today reported net income for the three months ended September 30, 2013, of $2.7 million, or $0.01 per diluted share, on revenues of $42.6 million.

Generated $11.0 million of third quarter EBITDA.

Announced contracts for the construction of two jackup drilling rigs.

Contract awarded for Energy Endeavour.

Option exercised for the Energy Enhancer.

The company's directors have declared a dividend of $0.05 per share.

Management Comment

Gary W. Casswell, Northern Offshore's president and CEO, commented, "As announced in a recent press release, we have taken a significant step forward in the execution of our strategy to transform the company's asset base to a newer rig fleet by commencing the construction of two high specification jackups, with options for two more, capable of working in most geographic areas around the world outside of the North Sea. These units will be constructed in China at very competitive prices and will be fully equipped to handle the most demanding client requirements and drilling applications. We are confident that the successful execution of this asset renewal strategy will be to the long term benefit of all of our stakeholders.

Mr. Casswell went on to say, "Maersk Oil and Gas has renewed the contract on our jackup Energy Enhancer operating in Denmark for one year from July at significantly higher rates. Additionally, the jackup Energy Endeavor has recently commenced a seven month plus options contract for Wintershall in the Netherlands at North Sea market rates. With four of five units now under contract we expect to see improved cash flow going forward. And as always, we continue to focus on the safe operation of all of our units and providing a world class service to our clients."

Third Quarter Analysis

Net income for the three months ended September 30, 2013, was $2.7 million, or $0.01 per diluted share. This compares to net income of $17.8 million, or $0.12 per diluted share for the third quarter of 2012. Revenues for the third quarter of 2013 were $42.6 million, compared to $62.2 million for the third quarter of 2012.

For the nine months ended September 30, 2013, net income was $5.4 million, or $0.03 per diluted share. For the same period in the prior year, net income was $6.0 million, or $0.04 per diluted share. Revenues for the first nine months of 2013 were $128.1 million, compared to $134.0 million for the same period in 2012.

Revenues for the three months ended September 30, 2013, were lower than the same period of 2012, primarily because of a decrease in dayrate revenues from the drillship Energy Searcher and jackup Energy Endeavour due to lower utilization of these rigs as compared to the same period in the prior year. This decrease was partially offset by an increase in revenues from the jackup Energy Enhancer due to higher dayrates attributable to the exercise of the rig's first one-year option during the current quarter.

The tariff revenues from the Northern Producer averaged approximately $112,000 per day in the third quarter of 2013. The company expects pricing levels to remain stable and production to decrease slightly in the near term.

Drilling and production expenses for the third quarter of 2013 were $1.7 million higher as compared with the same period in 2012, primarily due to higher labor and maintenance costs, which were partially offset by a decrease in the idle costs of the drillship Energy Searcher.

Third quarter 2013 depreciation, general and administrative expenses, interest expense, amortization of deferred financing fees and other financial items were comparable to those of the same period in 2012.

As of November 11, 2013, the company had an outstanding credit facility balance of $22.0 million and a cash balance of $37.0 million.

The company's directors have declared a dividend of $0.05 per share, or approximately $8.2 million. Shareholders of record with the VPS on November 29, 2013, will be entitled to receive the dividend, which will be paid on or around December 16, 2013. The shares of the company will be trading ex-dividend from November 27, 2013.

Conference Call Information

Northern Offshore, Ltd. will conduct a teleconference with security analysts at 9 a.m. CT, November 14, 2013, to discuss the company's quarterly results. Individuals wishing to participate in the teleconference should call (866) 700-5192 (in the U.S.) or (617) 213-8833 (outside the U.S.) about five to ten minutes prior to the scheduled start time and refer to participant password 96790263.

The conference call also will be accessible by logging on to the company's website at http://www.northernoffshorelimited.com. After logging on, go to "Investor Relations" and select the conference call webcast.

About the Company

Northern Offshore, Ltd. is a Bermuda holding company which operates offshore oil and gas drilling units and one production vessel in various markets around the world, including the North Sea, the Indian Ocean and Southeast Asia. The company's fleet consists of four drilling units (a drillship, a semisubmersible and two jackup drilling rigs) and one floating production facility. More information on Northern Offshore, Ltd. may be found by visiting the company's website at http://www.northernoffshorelimited.com.

This announcement contains statements that reflect the company's expectations or predictions of the future. These statements are forward-looking statements. These forward-looking statements may include statements regarding earnings guidance, capital allocation strategy, the impact of activity levels, business performance, and other market and industry conditions. The company's actual results could differ materially from those reflected in such forward-looking statements. Additional information concerning factors that could cause actual results to differ materially from those in the forward-looking statements is contained from time to time in the company's regulatory filings. The company disclaims any intention or obligation to revise any forward-looking statements, including financial estimates, whether as a result of new information, future events or otherwise.